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The Evolution of Serbian Forex Through NBS FX Swaps


  • Branko Zivanovic

    () (Belgrade Banking Academy)

  • Ana Jolovic



This paper emphasizes the main goals of using derivatives as a monetary tool, increasing the foreign currency liquidity of commercial banks and controlling the volatility of the national currency. Over the past few years, FX swaps, very often mistaken for currency swaps, became a popular monetary instrument among central banks. Since 2007, inter-central bank swap credit lines have become a role model for supporting the foreign currency liquidity of national commercial banks. The National Bank of Serbia introduced FX swap transactions as part of a special facility for supporting the country’s financial stability. Our research indicates that the NBS is not part of a swap credit line, but rather uses FX swaps internally and in a very fragmented manner. The trading volume of the newly-introduced instrument has been quite modest. The quiet introduction of FX swaps has failed to make any insignificant impact on the stabilization of the national currency, and has caused a fairly minor increase in EUR liquidity. At the very end it is worth mentioning that, regardless of the first results, NBS swaps mean that the Serbian forex derivative market has “crossed the Rubicon”.

Suggested Citation

  • Branko Zivanovic & Ana Jolovic, 2012. "The Evolution of Serbian Forex Through NBS FX Swaps," Economic Analysis, Institute of Economic Sciences, vol. 45(3-4), pages 14-30.
  • Handle: RePEc:ibg:eajour:v:45:y:2012:i:3-4:p:14-30

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    More about this item


    FX swap; monetary policy; central bank; FX currency liquidity; RSD volatility; National Bank of Serbia;

    JEL classification:

    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • D53 - Microeconomics - - General Equilibrium and Disequilibrium - - - Financial Markets


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